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Telecoms Fraud & Revenue Assurance Interview E-Book In conversation with two leading telecoms RA and fraud professionals about management buy-in, successful strategies, and the future cyber threat

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Telecoms Fraud &

Revenue Assurance

Interview E-Book

In conversation with two leading

telecoms RA and fraud professionals about

management buy-in, successful strategies,

and the future cyber threat

It seems like T-Mobile is really doing some cool stuff around that building customer trust space. You mentioned coverage, invoice checks and automating activities, and those are some ways that T-Mobile is overcoming this challenge. The recent TalkTalk hacks have shaken up the industry a little. Did the news coverage encourage any special measures at T-Mobile? MI: Well, we measured the coverage with standard methods, which means there are worldwide measures to measure the coverage of revenue assurance. And in our case, we tried to automate everything

that we can, which means we have our own analysis platform in our revenue assurance department and we also have access to all the possible data of the company – meaning all the customer data, all billing data, all rating data, all network data. We create our automated processes within this analysis platform to investigate and identify the leakages and the errors in the various processes. Something I want to talk about is how you educate customers. If we move on to 4G, 5G and LTE, the new introduction of new technology always means the possibility of new fraudulent opportunities, hacks and the like. How is

T-Mobile educating its customers so they don’t fall into any unwanted traps? MI: The question deals with usage behaviour, and using 3G stepdown and pay for more volume and more speed is the way to educate customers to behave rationally in this area. So, actually, we do not really have this fraud problem in the 4G and 5G and LTE world. What challenges does the Internet of Things (IoT) bring for fraud and revenue assurance professionals? MI: I’m not sure there’s much more we can do than we are already in this area. We have turned on our obligatory virus application on our handsets and we contact customers and tell them about the threats in using their mobile phones and the various applications which can attack their mobile phones. But more than that, I’m not sure. How do you align your RA strategies across the globe? How do you ensure your customers are protected no matter where they go? MI: We have three measures in this; the first one is observing the suspicious destinations with our full management system. The second one: we have evaluated the pros and cons and decided to block call-forwarding abroad for all our customers. We really looked at the loss and profit, and we found that the losses are potentially far greater than the revenue that we would gain from call-forwarding abroad. This has banished fraud. The third measure was to set a limitation on the number of private calls abroad, which means the customer is only allowed to make four or five private calls simultaneously.

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R A F R A U D R A F R A U D

Mohamed Ibrahim, Senior Manager Customer Finance, T-Mobile Austria

Convincing senior management to buy into revenue assurance (RA) initiatives is, arguably, the biggest challenge for telecoms fraud and RA professionals. How are you overcoming this at T-Mobile? MI: Well, of course, in the terms of cost savings, it’s very difficult to convince senior management to support some revenue assurance initiatives, but there are some good solutions for that. For example, some initiatives have an obvious business case, which means that profit is almost guaranteed and management can not resist supporting that. This is the first way. The second one: Profit share models are always a good way to do that, which means if we have an agreement with some vendors, they will get their money if we find any leakages or any losses in our business. And in this case, the management will easily agree to support that. What strategies have proven successful? You mentioned the way you need to interact with the Board to make sure that they’re brought in every step of the way, but is there anything else innovative that T-Mobile is doing that other companies should be?

MI: Yes, actually, we are trying to go with the modern methods of science such as machine intelligence and opening some new fields of revenue assurance which can increase our coverage and also increase our efficiency. For example, we are working on using semantic methods to get non-structured data into a database, which will ensure that all the data normal documents, like PDF or Word documents, are transferred to our systems. And we’re using modern semantic methods with a research company to help us to do this. This should increase transparency and also the coverage of our revenue assurance activities. The next challenge is building customer trust. Once one security scandal happens it can be quite hard for any company to recover. How is T-Mobile ensuring its customers have nothing to worry about? MI: There are of course some challenges which can affect customer trust. For example, the problem of the complexity of systems to extract errors. This is the first problem. The second one is if we don’t have enough resources to cover most fields or to prevent all the errors.

These are the key problems that can affect customer trust negatively. But in order to act against that, there are some methods which we are following here. For example, preventing errors is the easiest way to gain customer trust. And to do that, we have to create sufficient resources to extend the coverage of revenue assurance activities. So at T-Mobile we have shifted some revenue assurance activities to other business units, like Customer Service, for example, so we could increase the coverage. We can also share resources within the Customer Finance department, which means we can manage our coverage and we can also increase our invoice checks. In addition, we automated many activities, for example, to make it more efficient to check the invoices or to observe the rating chain. The most important to win the customer trust is to be honest with the customer, to produce positive experience, which means if you really have made a mistake, for example in an invoice, and if you over-charge the customer, just give it back on the next invoice; this creates a positive experience and increases customer trust.

This has helped significantly reduce RS fraud across the globe. What about crisis management and damage limitation in the era of cyber threats? How is T-Mobile making sure its network stays up and running when calamity hits? MI: As I mentioned before, we have n obligatory virus application for all our customers, which is a basic virus protection. If the customer needed to upgrade, they must pay for that, but we have always a minimum virus protection

on every handset. And we communicate to the customers in the various media and also, sometimes also directly that they have to be careful about the cyber threats. Speaking more generally now, not specific to T-Mobile, but more in terms of the telecoms industry, in the event of a cyberattack, what should a company do? MI: The development of cyberspace is unbelievably quick and the threats is evolving rapidly too. The fraudsters are very intelligent and working everyday to

improve their skills. It’s a very hard challenge and we must take steps to try and educate the customers in how to protect themselves. For example, there are potential threats from WhatsApp or similar applications that have access to all their data, but how would you protect them from not installing the applications? This is a very, very big problem and a big challenge, and I don’t think there will be any protection except for the behaviour of customers themselves.

Convincing senior management to buy into revenue assurance (RA) initiatives is, arguably, the biggest challenge for telecoms fraud and RA professionals. How are you overcoming this at Deutsche Telekom (DT)? GP: Revenue assurance and fraud are risk functions which deal with technical issues and language that is difficult for senior management to understand. This is especially true when the functions are getting more mature and the financial deliverables are lower. But that definitely does not mean we should give up. This is where the new era of RA and fraud development starts: adopting more risk techniques in the functions and educating the senior management on the value add to the business. With the years of existence, the functions are likely to have small, agile, knowledgeable teams and established processes where the support to the core business in the company is acknowledged. If this is true, and it’s supported by the right set of measures and KPIs when presented to the senior management, I simply believe that the results will speak for themselves. That’s the strategy we have at DT, shifting from a traditional RA function towards a more risk-oriented one where the risks coming

from new technologies and/or change management processes are treated with enterprise risk management methodologies. That doesn’t mean only risk evaluation, but starting from communication and consultation with the stakeholders, risk identification, assessment, and treatment. So, it’s important to communicate with the stakeholders and management, and to point out the risks and the treatment proposed by RA. Why do you think it's such a challenge to get buy-in for RA? After all, isn't prevention better than a cure? GP: Looking at financials is the most common way of business value measurement. The risk aspect is usually overlooked until a big problem occurs, which can have a range of consequences, both measurable and non-measurable. It’s essential for the risk functions to use such cases as lessons learned, especially for the management team. An additional aspect that is overseen in the RA KPIs is the customer impact, or even more important the prevented customer impact. When the right set of KPIs is presented to the management, it should not be so difficult to get the buy-in.

However, providing stakeholders with education and training in what RA is about, and at the same time comparing it to everyday life situations, will help with their understanding and support. Take the example of health insurance: Even if we never use it that does not mean it’s not worth the investment. And that’s basically the main role of RA, to prevent problems from occurring for a reasonable price. Thinking about the ongoing problem of cyber data attacks, what role can fraud and revenue assurance teams play in their detection? GP: RA is still somehow an offline function and in my personal opinion cannot contribute much to the prevention of cyber data attacks. And when it comes to the cyber attacks, the most important thing is discovering and stopping it before it even happens – at the point of detection it is already too late. Therefore, new techniques need to be designed that will enable real-time processing of the (signalling) data and discovering or stopping the attacks prior to happening. Honey pots essentially.

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has to turn it into a weapon,

because that’s what it is

R A F R A U D R A F R A U D

Download the

agenda today!

Gjurgjica Pesheva, Group Accounting & Customer Finance, Senior Expert Revenue Assurance and Billing , Deutsche Telekom AG

What about educating your customers? If we move on to 4G, 5G and LTE, the new introduction of new technology always means the possibility of new fraudulent opportunities, hacks and the like. How is Deutsche Telekom educating its customers so they don’t fall into any unwanted traps? GP: The hackers are always at least one step ahead of the Operators and a few steps ahead of the customers. Therefore, Operators need to work a lot more on prevention to protect the network and their customers, especially when moving to the IP world. But unfortunately the Operators still have a limited scope for intervention (within their own network) while the main treats could come via global players in the telcoms industry. In addition, the customers need to educate themselves, but I don’t see the role of the Operators as the most important in this case. There are so many fraudulent activities, like social engineering, when it’s simply not possible that all the customers can be educated not to call back on each and every call/message with all that promising or even life-changing content. What challenges does the Internet of Things (IoT) bring for fraud and revenue assurance professionals? GP: The only thing that is for sure with IoT is the increased volume and variety of data that needs to be processed, analysed and stored in a cost effective way for RA and fraud purposes. What business models that will be developed behind the IoT are still not clear or defined. But RA and fraud professionals need to be prepared for the new challenges. And in

my personal opinion, the key to the right preparation lies in being ready to process any format of structured and unstructured data from any data source, be ready with analytical capabilities and make the process of “learning by doing” much cheaper. The traditional ways of knowing the data before starting with the controls will be obsolete. I see big data as an enabler for the challenges coming with IoT, but it’s a matter of internal decision how fast the RA and fraud will get prepared and not miss the opportunity to be in line with the industry trends. The RA and fraud software vendors also need to prepare the tools to support the velocity, volume and variety of data for a cheap price, especially for the big operators where the benefits of big data are highest.

Where do the biggest opportunities in RA lie? GP: My answer is very simple: The biggest opportunities for RA lie where the revenues and costs are coming from in the operator’s business model. That means being flexible, dynamic and prepared for the changes. What I really feel is important to stress is that I see an urgent need for revenue assurance to become more like a profit assurance function. This mean taking care of the cost side in the same manner as the revenue side and extending the scope from traditional RA to being profit-oriented. Therefore, my mission statement for RA would be: Minimize the risk of negative customer impact, losses and unjustified gains, which will result in improved profits, revenues and cash flow. What will your presentation focus on at the Telecoms Fraud and Revenue Assurance conference in March? What are you hoping to get out of the event? GP: The topic I’ll present on the conference is related to the Group HQ RA function, looking at the bigger picture and value for RA and turning the diversity of the local operations into an advantage. The topic itself is very interesting and different from being responsible for just the local RA function. The challenges are different, but the opportunities are different too. Having my expert RA knowledge and a strategic governance view, I’ve got a new way of thinking about Revenue Assurance. I’ll try to present that to the audience in London. I expect to meet peers, network and set my brain in an “incubator mode” for generating new ideas based on all great inputs I’ll get there.

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Top Reasons to attend Telecoms Fraud &

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- Engage with a highly senior-level speaker panel

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Interested in

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R A F R A U D

When it comes to the cyber

attacks, the most important

thing is discovering and

stopping it before it even

happens – at the point of

detection it is already too late.

Therefore, new techniques

need to be designed that will

enable real-time processing of

the (signalling) data and

discovering or stopping the

attacks prior to

happening.